Investment research service StockStory has updated its model portfolio guidance, urging investors to exit two consumer-facing growth names — Zillow Group and Flutter Entertainment — while adding Palantir Technologies as its lone buy among growth stocks. The recommendations come as StockStory stresses the importance of sustainable growth, warning that rapid momentum can evaporate as it did for dot‑com leaders like Cisco and during the post‑2020 market unwinds.
Zillow (NASDAQ: ZG) is on the sell list despite being the dominant U.S. online real‑estate marketplace founded by Expedia alumni Lloyd Frink and Rich Barton. StockStory highlights a troubling top‑line trend — an average annual revenue decline of about 5% over the past five years — and flags limited financial flexibility, noting a free cash‑flow margin of roughly 10.6% across the last two years. The firm says returns on invested capital have been rising only as management reallocates into more promising ventures, a shift that may indicate structural pressure on Zillow’s legacy business. Zillow was trading near $40.63 a share at the time of the report, implying about an 18.2‑times forward price‑to‑earnings multiple.
Flutter Entertainment (NASDAQ: FLUT) also drew a downgrade from StockStory. The operator behind FanDuel, PokerStars, Paddy Power and Sky Betting & Gaming showed one‑year revenue growth of about 16.6%, but the research service argues that its recent expansion — roughly 17.9% annual revenue increases over the last two years — has lagged other consumer discretionary peers. Operating margins are thin, around 3%, and free‑cash‑flow margins sit near 5.4% for the last two years, leaving limited capacity to self‑fund strategic investments or return capital. Flutter was cited at approximately $105.50 per share, or a forward P/E of about 14.3.
By contrast, StockStory names Palantir Technologies (NASDAQ: PLTR) as its top growth pick, pointing to rapidly accelerating revenue and an expanding competitive position. Palantir — named after the all‑seeing stones of Lord of the Rings — builds data‑integration and analytics platforms used by government agencies and commercial customers to operationalize large, disparate data sets for decision‑making. The company posted one‑year revenue growth of roughly 56.2%, a pace StockStory views as evidence of durable demand for its software and a widening moat in mission‑critical analytics.
The report underscores a broader theme for investors: distinguishing fleeting momentum from businesses capable of sustaining long‑term growth. StockStory’s guidance aims to steer readers away from names where margins and cash generation are constrained, while highlighting firms that currently combine strong top‑line expansion with the potential for durable competitive advantage. The firm also offers deeper free research reports on each recommendation for investors seeking fuller financial analysis.